One effect of our preference for denser living

One of the themes to which we return again and again on this blog is the shift in consumer preferences from suburban, single-family homes to denser, urban apartments.

I obviously love this shift, because it’s very good for our business.

But, interestingly, the shift has not been good for housing sector, which is typically a key driver of economic growth but which is presently contributing far less to GDP than is normal for this part of the economic cycle.

“…[L]iving preferences have shifted. In the past, builders put up entry-level homes in far-flung suburbs where land is cheapest, but many buyers today aren’t willing to commute to get a better deal. Instead, many are opting for apartments closer to where they work and socialize…”

The article makes the case that construction of an urban apartment adds less to GDP than construction of a suburban home. (This makes sense: denser dwellings are inherently more efficient, in part because they have a lower ratio of surface area to volume.)

So, by choosing to live in cities instead of suburbs, we’re damaging the economy. But I’m ok with that, because I’d rather GDP were a little lower and we, as a society, were a little less wasteful.

As seen in:

Moses Kagan

Hi there. My name is Moses Kagan. Through my company Adaptive Realty you can gain access to local area knowledge and deals in real estate. If you're looking to buy, renovate, manage or sell apartment buildings in Southern California, you're in the right place.